Response to Swedish Questionnaire

I write on behalf of the Biotechnology Industry Organization (BIO) in response to your request for views of European industry on proposed requirements to indicate the origin of material in patent applications. BIO is a trade association representing more than 1100 members in over 33 countries including Sweden and other Member States of the European Union. BIO members, many of whom are small and medium sized enterprises, depend on effective intellectual property systems to obtain capital and to recoup their investments in research and development.

The biotechnology industry is a dynamic, research intensive industry. In 2003, biotechnology produced more than 370 biotech drug products and vaccines currently in late stage clinical trials that target more than 200 diseases. Some biotechnology products – such as EPO, Herceptin® and Xigris® – have revolutionized the way society deals with cancer and other chronic diseases. Biotechnology is responsible for hundreds of medical diagnostic tests, which encompass everything from keeping the blood supply safe from AIDS to home pregnancy tests. Industrial biotechnology

applications have led to cleaner processes that produce less waste and use less energy and water.

Increased crop yields and decreased reliance on herbicides and pesticides benefit consumers through less expensive, safer foods. The biotechnology industry operates in an environment that requires sufficient funding from public and private sources of basic and applied research, effective intellectual property protection standards (particularly patent law), efficient and secure technology transfer, measures that promote collaboration among diverse entities, and, critically, strong incentives for private investments for financing. Patent protection, which stimulates not only inventive activity but is essential to delivering new products and services to the market based on these inventions, is critically important to biotechnology. Investors recognize patents as important benchmarks of

progress in developing product lines and revenues. Investment provides the life blood of a research-intensive industry, and intellectual property protection serves as the enticement for private financing. The promise of a return on investment, rooted in patents on biotechnology inventions, helps to attract capital in these high-risk biotechnology products.

Indeed, many start-up biotechnology companies have been created based solely on the promise of their patent portfolios. The vast majority of biotechnology companies do not have products on the market; rather they have only patents or patent applications on what may eventually become a commercially viable product or technology. Patents protect the assets that entice investment, facilitate licensing, encourage collaborations and joint ventures, and promote technology transfer for

further development of a promising technology or product. The capital generated as a result of this intellectual property supports companies as they invest the hundreds of millions of dollars and the decades necessary to develop successfully a commercial biotechnology product.

Confidence in the patent system by the innovation sector, the investment community and the consuming public is especially important. Consequently, we appreciate your efforts to obtain the views of industry on aspects of these important and controversial requirements for patent systems.

As a general matter, we note that our members have found it difficult to form definitive views on the topics presented in the invitation for comment. One reason for this is that so few of our members engage in bioprospecting activities. A second, more significant reason is that most of the questions posed concerning disclosure of the geographical origin of genetic materials are vague in several key respects (e.g., what would trigger an obligation, what is the specific nature of the obligation, what

must be disclosed). As a result, the enclosed response represents the best efforts of our members to reply to your general inquiries.

We can observe that our members generally oppose proposals that would require the identification and disclosure of the origin of genetic materials in patent applications. The general basis for this view is that our members do not believe it appropriate to use the patent system to enforce obligations unrelated to substantive patent standards. Instead, our members believe that measures that directly regulate the activities in question should be employed, if such regulation is considered necessary.

Our members also believe that use of the patent system to indirectly regulate activities under the Convention on Biological Diversity will further discourage use or development of genetic resources, which would undermine one of the objectives of that Convention (i.e., the creation of “benefits” that can then be shared with a country that provides access to the resource). Moreover, based on our review of various “disclosure” proposals, we believe it likely that such requirements and associated

sanctions would be structured in ways that would create unjustified risks to ongoing business enterprises, and several of these proposals appear to be inconsistent with both the spirit and letter of obligations in the TRIPS Agreement and other international agreements. As such, BIO members believe that any specific proposals would have to be carefully and independently evaluated.

We would be pleased to answer any additional questions that you may have.

Sincerely,

Stephan E. Lawton

Vice President and General Counsel

Biotechnology Industry Organization

Enclosure

Response of the BIOTECHNOLOGY INDUSTRY ORGANIZATION

to the request for views from the KOMMERSKOLLEGIUM

a. What are the advantages and disadvantages from your perspective of a

requirement to indicate geographical origin?

(i) General Observations

Before addressing the question of special patent disclosure requirements, BIO

and its members wish to reiterate their support for appropriate, transparent

mechanisms to ensure that countries and private entities adhere to obligations they

undertake under the Convention on Biological Diversity (CBD). As the CBD

emphasizes, entities that wish to obtain access to and then to use genetic resources

may do so only by reaching “mutually agreed” terms with the country providing

access to the resource, both as to prior informed consent (PIC) and as to benefit

sharing. BIO members have consistently expressed support for mechanisms that

would permit them to readily comply with these requirements for prior informed

consent and benefit sharing, and look forward to working with you and other

governments to develop and implement such regimes.

As a general matter, it is premature to express a view as to whether a

requirement to indicate the “geographical origin” of genetic materials in patent

applications will have advantages or disadvantages without first resolving several

important questions1.

- First, what is the objective that is to be served by the requirement?

- Second, what is the specific nature of the requirement to disclose the

“geographical origin” and when would it be implicated?

As to the first question, to the best of our knowledge, the sole justification for

a requirement to indicate the geographical origin of a genetic material associated with

an invention would be to implement obligations of the Convention on Biological

Diversity (CBD). We note that special disclosure requirements, by definition, are not

designed to, and will not, facilitate the examination of patent applications or advance

the objectives of the patent system. The information that could be collected by such a

requirement will not assist patent office officials, applicants, or the public in